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OCAHO Reduces Employer’s Fines for I-9 Violations

The Department of Justice’s Office of the Chief Administrative Hearing Officer (OCAHO) recently reduced fines imposed on New Outlook Homecare, LLC, for violations related to the Form I-9, Employment Authorization Verification. The complaint filed by U.S. Immigration and Customs Enforcement (ICE) alleged that New Outlook failed to ensure that employees properly completed section 1 of the I-9 and that the company failed to properly complete sections 2 or 3 of the form for 22 employees. One of the charges was subsequently dropped because it was for the owner of New Outlook, for which no I-9 was required.

The total penalty sought was $21,598.50, which OCAHO reduced to $9,450. New Outlook characterized the violations as minor clerical errors, but OCAHO said there were “serious substantive errors” in the completion of section 2 of the forms. Section 2 for all but three employees was blank. The forms contained no signatures attesting that New Outlook had examined documents to verify the employees’ identities and authorization to work in the United States. OCAHO noted that case law confirms that such failures constitute serious violations.

ICE had calculated a baseline penalty in accordance with internal agency guidance that sets a penalty of $935 for each violation when the employer’s error rate exceeds 50 percent. An ICE auditor stated that the government mitigated the penalty by 5 percent based on New Outlook’s status as a small business, but aggravated the penalty based on the seriousness of the violations. ICE initially aggravated the fine by 5 percent based on a lack of good faith, but later treated this factor as neutral, as it did the remaining statutory factors: the absence of any history of previous violations and the absence of unauthorized workers.

OCAHO found that although the violations were serious, penalties at or near the maximum permissible “should be reserved for more egregious violations than have been demonstrated here.” Penalties should be sufficiently meaningful to deter future violations but should not be “unduly punitive” in light of the respondent’s resources, OCAHO said. Given the nature of the business and considering the record as a whole “in light of the general public policy of leniency toward small entities,” OCAHO adjusted the penalties “closer to the midrange of permissible penalties,” setting the fines at $450 per violation, for a total of $9,450.